• Zambia withdraws its request for a 12-month extension of its IMF lending program worth about $145 million in additional funding.
• The IMF confirms the program will expire at the end of January 2026, with a final review expected this month.
• The decision comes as Zambia prepares for August elections amid double-digit inflation and a severe power shortage.

The Zambian government has withdrawn its request for a 12-month extension of its loan program with the International Monetary Fund, which is due to expire at the end of January 2026, the multilateral lender said on Wednesday, January 7.

The decision halts a process that would have unlocked about $145 million in additional financing as the country prepares for general elections in a context of double-digit inflation and a severe electricity shortage.

“While the authorities had initially requested a one-year extension of the Extended Credit Facility arrangement, they informed the IMF team that they would not pursue this option,” an IMF spokesperson said.

The spokesperson added that the IMF executive board is expected to consider the final review of the program later this month.

The government provided no explanation for the reversal.

This decision comes as President Hakainde Hichilema’s administration prepares for general elections, including presidential, legislative, and municipal polls, scheduled for August.

Zambia is completing a debt restructuring process and had expected to secure about $145 million in additional funding through a 12-month extension of the IMF program.

The southern African country has benefited from a surge in copper prices, which reached record levels in recent years.

The government expects an improvement in public finances in 2026 and forecasts that the budget deficit will shrink by more than half while economic growth will exceed 6%.

The IMF approved a $1.3 billion Extended Credit Facility for Zambia in August 2022.

The IMF increased the total program size to $1.7 billion in June 2024.

The IMF has disbursed about $1.55 billion to date.

The program supports Zambia’s Eighth National Development Plan and prioritizes macroeconomic stability, debt and fiscal sustainability, stronger governance, and inclusive growth to improve living standards.

Zambia defaulted on its external debt in 2020.

The government requested a restructuring of about $13 billion in external debt in February 2021 under a G20-backed framework for the world’s poorest countries.

This article was initially published in French by Walid Kéfi

Adapted in English by Ange Jason Quenum